Ammon News - Gold prices fell on Friday ‌after stronger-than-expected US payrolls data reinforced expectations that the Federal Reserve could keep interest rates higher for longer, boosting the dollar and Treasury yields.

Spot gold fell 0.3% to $4,074.36 per ounce by 01:54 p.m. ET (1854 GMT). ​The metal fell by more than 1% to hit a low of $4,033.29 earlier in ​the session.

Spot gold was up 5.2% for the week, on track for ⁠its best week since August.

US gold futures for December delivery settled 0.9% lower at $4,074.90.

The US ​dollar rose 0.7% to its highest level since October 29, making dollar-denominated gold more expensive for ​holders of other currencies, while benchmark 10-year Treasury yields also climbed.

"Gold gapped lower on a stellar employment report (that was) strong across the board, but is trying to claw back higher. This is a litmus test for ​this week's rally," independent metals trader Tai Wong said.

US nonfarm payrolls increased more than expected in ​October and the unemployment rate fell to 4.1%, suggesting the labor market remained resilient and giving the Federal ‌Reserve ⁠more scope to focus on inflation stemming from the Middle East conflict.

Traders currently see an 81% chance that the Fed will raise rates in December, compared with 72.8% before the payrolls report, according to CME's FedWatch tool.
Higher interest rates raise the opportunity cost of holding non-yielding bullion, making ​gold less attractive to ​investors.

Brent crude was ⁠on track for a sharp weekly drop on expectations of a de-escalation in the US-Iran war after midterm election results, although persistent Middle East supply concerns ​continued to support prices.

Two Federal Reserve officials on Thursday backed small, steady ​rate hikes ⁠to rein in above-target inflation.

On the physical front, lower gold prices encouraged Indian retail buying ahead of the key Diwali festival. Gold had dropped to a one-year low of $3,869.85 an ounce on October ⁠30.

Among ​other metals, spot silver rose 0.8% to $52.18, platinum gained ​1.6% to $1,541.42, while palladium fell 0.6% to $1,024.59. All three were poised for weekly gains.


Reuetrs